Rio Tinto (RIO)

Commonwealth Bank maintained an “overweight" recommendation for
Rio Tinto
, saying the mining heavyweight remains its preferred stock in the category, despite the slipping of a pit wall at its Bingham Canyon copper mine in Utah.

CBA says the mine was expected to earn $US701 million net profit after tax in 2013, around 6 per cent of Rio’s earnings. It estimates Rio’s operations there will be suspended for up to 12 months and reduced its expectations to a loss of $79 million.

CBA also reduced its earnings forecasts for Rio by a further 2 per cent in 2013 and 5 per cent in 2014 and 2015, because of changes in its aluminium price forecast.

Rio’s earnings per share were $US5 in 2012. CBA forecasts EPS at $US6.66 in 2013 and $US8.76 in 2014.